Shares of Intel (NASDAQ:INTC) jumped nearly 6% in premarket trading Tuesday after SoftBank Group Corp. (USOTC:SFTBY) announced plans to invest $2 billion in the U.S. chipmaker. The Japanese conglomerate aims to help Intel develop advanced semiconductor manufacturing facilities in the United States.
SoftBank will acquire Intel common stock at $23 per share, slightly below Intel’s Monday closing price of $23.64.
“This strategic investment reflects our belief that advanced semiconductor manufacturing and supply will further expand in the United States, with Intel playing a critical role,” said SoftBank CEO Masayoshi Son.
Intel CEO Lip-Bu Tan welcomed the backing, noting that the deal aligns with SoftBank’s artificial intelligence ambitions.
The investment comes as Intel navigates several years of declining sales and shrinking cash reserves, having fallen behind rivals in capitalizing on the AI boom.
“We think the positive move in INTC post this announcement is justified as we think investors would consider this to reflect a vote of confidence in INTC’s long-term transformation efforts, which includes the company’s focus on improving its balance sheet positioning,” Wells Fargo analyst Aaron Rakers said.
Earlier on Monday, Bloomberg reported that the Trump administration had been exploring taking a 10% stake in Intel by converting part or all of the company’s CHIPS Act grants into equity.
Federal support, together with SoftBank’s investment, could give Intel more flexibility to stabilize its loss-making foundry business. Still, investors remain cautious about the chipmaker’s ability to turn around its finances after years of lagging sales.
Intel has fallen behind competitors such as NVIDIA Corporation (NASDAQ:NVDA) and Advanced Micro Devices Inc. (NASDAQ:AMD) in developing advanced AI chips. Its foundry operations have also struggled to compete with TSMC (NYSE:TSM), whose chipmaking processes have overtaken Intel in recent years.
CEO Tan, who recently met with former President Trump, has outlined plans to scale back factory construction and establish a more structured product roadmap to revitalize the company. However, challenges remain, particularly as Intel’s foundry segment continues to consume cash.
SoftBank’s investment marks another step in the company’s aggressive push into AI and semiconductor manufacturing. Son has emphasized AI and chipmaking as strategic priorities, following a strong return from tech investments in the June quarter and ongoing plans to expand U.S.-based AI infrastructure through a $500 billion partnership with OpenAI.
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